What is the implied range of unit overage cost per washer

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Reference no: EM131030998

Demand for carpet washers at a Publix store in Gainesville is shown in the following:

Demand (units/day) (0, 1, 2, 3, 4, 5) and Probability (0.25, 0.15, 0.20, 0.25, 0.10, 0.05) respectively

Carpet washers are rented by the day only. Publix makes a profit of $12/washer/day and incur a loss-of-goodwill cost of $2/washer if a customer requests a carpet washer and the store is out of stock. Currently, the store keeps three washers in stock. Assuming that Publix’s stocking decision is optimal, what is the implied range of the unit overage cost per washer?

Reference no: EM131030998

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